IT Spending Grows Slowly, But Value Arguably is Quite a Bit Higher Than Spending Suggests

In a business where efficiencies are being reaped, traditional spending metrics have to be interpreted. Traditionally, higher spending on information technology was interpreted as a sign of growth, while spending declines were seen as signs buyers were slowing investments.

That is less true, now, as open source and other sources of efficiency (white label gear, resource sharing) also are at work. In other words, compared to a decade or two ago, computing capability costs as much as an order of magnitude less than it used to. In other words, enterprises can achieve their goals at lower cost, in some cases far lower cost.

Worldwide information technology spending is forecast at $3.5 trillion in 2017, a 1.4 percent increase from 2016, according to Gartner. This growth rate is down from the previous quarter's forecast of 2.7 percent, due in part to currency issues (U.S. dollar strength).

The data center system segment is expected to grow 0.3 percent in 2017. While this is up from negative growth in 2016, the segment is experiencing a slowdown in the server market.

Enterprises are moving away from buying servers from the traditional vendors and instead renting server power in the cloud from companies such as Amazon, Google and Microsoft. This has created a reduction in spending on servers which is impacting the overall data center system segment."

Worldwide IT Spending Forecast (Billions of U.S. Dollars)
	2016	Growth (%)	2017	2017 Growth (%)	2018 Spending	2018 Growth (%)
Data Center Systems	171	-0.1	171	0.3	173	1.2
Enterprise Software	332	5.9	351	5.5	376	7.1
Devices	634	-2.6	645	1.7	656	1.7
IT Services	897	3.6	917	2.3	961	4.7
Communications Services	1,380	-1.4	1,376	-0.3	1,394	1.3
Overall IT	3,414	0.4	3,460	1.4	3,559	2.9

source: Gartner